Screwfix Nails Down Costs with PROACTIS

case study
Screwfix Nails Down Costs with PROACTIS
Fact File
The Challenge: Rapidlygrowing Screwfix Direct
was struggling to keep pace
with the processing of its
expanding flow of supplier
invoices without investing in
yet more staff resources.
The Solution: An automated
solution from PROACTIS
which supplied as a managed
service, streamlines the
processes of invoice receipt
and approval and reduces
manual intervention.
The Result: Screwfix
has been able to grow its
business without growing its
invoice processing resources.
Increased productivity, no
requirement to increase
headcount and efficiencies
from elsewhere in the
business have rewarded
Screwfix with annual savings
of £100,000.
Background
Established over 30 years ago as a family run business and a part
of Kingfisher plc since 1999, Screwfix Direct (Screwfix) turns over in
excess of £500 million and continues to grow. It is the UK’s largest
direct supplier of tools, accessories and hardware to tradesmen,
maintenance and repair organisations, and serious DIY enthusiasts.
The company’s headcount is over 5,000 with staff employed in the
trade counter division, with the remainder in head office, contact
centre and distribution centre operations. Alongside the next-day
delivery service for items ordered by telephone and online, Screwfix
continues to roll out trade counters. These outlets are stocking the
full range of products supplied for immediate collection.
Challenge
Rolling out a network of trade counters without
ramping up back-office costs was a challenge
for Screwfix.
In line with expansion, the 132,000 invoices
received each year into the business continued
to grow at a rapid pace. This growth was
resulting in substantial process inefficiencies
through lost and misplaced invoices and
lengthy invoice approval and document
retrieval, in addition to lowering employee
moral within the Finance department.
“We quickly realised that to meet the demands
that invoice processing was placing upon
the Finance department we would need
to add significantly to headcount,” notes
Richard Shoteh, Finance Systems Manager.
“Rather than just increase headcount to
cope, we wanted a better way of capturing
and approving invoices. We also wanted to
eliminate other types of paper handling and to
make cost savings and productivity gains.”
“Despite invoice volumes growing substantially, we have managed not to
recruit the additional staff we thought we would have to. This has saved
us in the region of £70,000 per year. With the additional efficiencies and
productivities we now have through using PROACTIS, we are enjoying
annual savings of over £100,000 continuously.”
Paul Roy, Director of Operational Finance, Screwfix Direct
proactis.com
[email protected]
case study
The Process
The Benefits
The solution took less than three
months to develop and roll out.
Once in live operation, it has
helped Screwfix to cope with the
extra workload without adding
to the number of people in the
Purchase Ledger team. In this
way, it has achieved the key
objective of the project as well as
all other objectives of efficiency
and cost saving. The solution
ensures that paper invoices are
rapidly converted and stored as
electronic images. It enables
Screwfix employees to retrieve
invoices from a secure internet
connection, or by the simple
click of a button from within
CODA. Key invoice information
is automatically extracted and
undergoes a confirmation process
against existing procurement
information within CODA, ensuring
that it is 100% correct prior to
being sent to the CODA system for
invoice matching. The PROACTIS
solution makes it much easier to
view the original invoice if a query
arises.
Screwfix evaluated both onsite and
outsourced document management
suppliers, and electronic data interchange
(EDI) suppliers. It included in its statement of
requirement the ability to handle electronic
invoices for those of its suppliers already
geared up for that. Its ultimate aim was to
take just one feed of data into its systems,
irrespective of how suppliers chose to invoice.
PROACTIS was invited to go through a length
exercise of understanding, at the end of
which it recommended an outsourced invoice
processing and document management
solution. This had capabilities to introduce
electronic handling of invoices as a future
phase. PROACTIS was also able to bring
to the party a history of working closely with
CODA to provide integrated solutions.
“PROACTIS showed us proven levels of
innovation and integration with our CODA
finance system and introduced us to a
number of companies who were very happy
with the combined solution.”
The Solution
The Screwfix implementation required
an innovative response to a number of
challenges, not least in integrating an
outsourced offering with onsite systems.
This was achieved by creating an exporter
from the PROACTIS Managed Service and
an importer into the onsite CODA system,
with the internet securely transferring invoice
information from PROACTIS to the Screwfix
Direct head office. Once invoices were
scanned, all the relevant information would be
captured, either through automated invoice
data capture or through the manual keying of
invoice information by the outsourced solution
personnel.
To achieve this, PROACTIS gained a
thorough understanding of the values that
were keyed and how exceptions were dealt
with. For example, rather than simply rejecting
invoices that lacked all the correct values and
asking suppliers to resend the paper invoice
with complete information, PROACTIS created
a web-based exception handler. This allowed
Screwfix to correct invoices with missing
values, and process them more rapidly.
Looking Forward
Such has been the success of the project
that PROACTIS is now working on further
inefficiencies within Screwfix’s processes,
including archiving trade account application
forms and matching stock invoices to goods
received notes (GRN) from warehouses. “The
ability to validate and automatically match
invoices at line level to GRNs will be a huge
benefit for the business and will significantly
save our teams time,” comments Paul Roy.
As for the company’s goal of processing
paper and heterogeneous file formats,
Screwfix is finding that its suppliers are
moving to electronic processing but are all
operating slightly different file formats.
“It’s almost impossible to impose a single
electronic system and get all your suppliers
to conform. Working with PROACTIS, we will
eventually take in paper and electronic files in
any format, then match them to GRN feeds at
line level,” concludes Paul Roy.
“The image is stored in the
document management solution
and can be retrieved when
required by the user, therefore
freeing up our storage and
providing us with a far more
robust audit trail” said Paul Roy,
Director of Operational Finance,
Screwfix Direct.
Whilst the Finance department
was the driver behind the solution
to cut down paperwork, benefits
have been experienced across the
business. PROACTIS’s document
management capabilities are also
being used by Human Resources
for employee records, and by
the Media team for the product
catalogues that are downloadable
from the internet site. Overall,
the docStore Managed Service
is exceeding its objectives and
is saving Screwfix £100,000 per
year, year upon year.
proactis.com
[email protected]